India's Bina Refinery Commissions Crude Distillation Unit After Six-Month Delay

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Researched by Industrial Info Resources (Sugar Land, Texas)--On June 29, India's Bharat Petroleum Corporation Limited (BSE:500547) (BPCL) (Mumbai) announced the commencement of operations at the Bina refinery in the Sagar district of Madhya Pradesh. The development of a 99-megawatt (MW) captive power plant (CPP) caused a six-month delay. This followed the contracting of state-owned engineering and manufacturing entity Bharat Heavy Electricals Limited (BSE:500103) (BHEL) (New Delhi) to set up the CPP by May 2009. Because of various internal delays, BHEL completed the CPP a year late, holding up the refinery's commissioning. The CPP will be supplying steam for the refinery operations.

The 6 million-ton-per-year Bina refinery was built by Bharat Oman Refineries Limited (BORL) (Bhopal, Madhya Pradesh) at an estimated cost of $2.42 billion. BORL is a 74:26 joint venture between BPCL and Oman Oil Company Limited (OOCL) (Muscat, Oman). Although the project was planned back in 1995, various financial issues and India's refinery over-capacity at that time led to delays in the project taking off. BORL commissioned its single crude-distillation unit (CDU) on June 29, and operations have begun with the production of kerosene and liquefied petroleum gas. The company has announced that all the other refinery units would be commissioned sequentially, and the facility would be fully ready for commercial production by late September this year.

The refinery will be processing crude oil imported largely from Saudi Arabia. BPCL has made arrangements for the supply of 500,000 tons of Saudi Arabian crude oil with which to begin operations. A 935-kilometer pipeline has been laid from BORL's crude oil terminal at the coastal port town of Vadinar in Gujarat to the refinery site. In July 2007, the $39 million contract for the 504 kilometers of pipeline running through Gujarat was awarded to Essar Construction (India) Limited (Mumbai), while the almost $30 million contract for the 431 kilometers of pipeline through Madhya Pradesh was awarded to Kalptaru Power Transmission Limited (BSE:522287) (Mumbai).

The refinery will produce about 600,000 tons per year of petrol and the same amount of jet fuel, and about 2.8 million tons per year of diesel. The kerosene and LPG under production are being sent to the company's marketing terminal at Bina, from where it will be shipped for onward sale. All the refinery products, except naphtha, will be targeted at the domestic market. The excess naphtha that cannot be sold in India will be exported.

BORL completed the mechanical development of the plant in December 2009, but could not start operations because of the unavailability of power from its CPP. The lump-sum turnkey (LSTK) engineering, procurement and construction (EPC) contract for setting up the CPP was awarded to BHEL in October 2006. The contract's scope included design, engineering, manufacture, supply, erection, commissioning and the associated civil works. The critical equipment included three steam turbine generators of 33 MW each, and 275-ton-per-hour circulating fluidized bed combustion boilers that could handle petroleum coke and limestone. This was to be the BHEL's first power plant to use petroleum coke as fuel. The almost $202 million contract was awarded after an international competitive bidding (ICB) process and was scheduled to be completed in 30 months. Equipment for the CPP was supplied by BHEL's plants at Bhopal, Hyderabad, Jhansi, Ranipet, Trichy and Bangalore. BHEL's Nagpur unit was deputed to implement the civil works, and erect and commission the CPP.

In August 2007, global EPC and project management company Punj Lloyd Limited (BSE:532693) (Gurgaon, Haryana) was awarded a $125 million LSTK contract to build the refinery's sulfur block. The contract was to be implemented within 25 months.

In September 2007, EPC and project management company NaftoGaz India Private Limited (Noida, Uttar Pradesh), the Indian subsidiary of Ukraine's oil and gas company NJSC Naftogaz (Kiev, Ukraine), was awarded two contracts for the Bina refinery project. The $122 million hydrogen generation unit was to be completed in 27 months, while the $54 million coke drum system was to be completed in 28 months. The hydrogen unit has a production capacity of 70,000 tons per year and was designed by Techinp Benelux BV (Zoetermeer, Netherlands).

In April 2008, the $18 million contract for completing the mechanical work at the refinery was awarded to Petron Engineering Construction Limited (BSE:530381) (Mumbai).

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